Highlights of Ag Panel Leaders at Farm Journal Forum

Top three Ag panel leaders offer their views on major issues at DC event

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Lawmakers are now making plans for what comes next in the wake of the failed Super Committee effort to cut at least $1.2 trillion from the US debt that potentially would have included a new farm bill plan. Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.), Ranking Member Pat Roberts (R-Kan.) and House Ag Committee Ranking Member Collin Peterson (D-Minn.) addressed the Farm Journal Forum, co-hosted by Informa Economics, in Washington, DC, Tuesday and offered their views on what is next for the panels.

Stabenow:

Farm bill process: The Ag panel chair said she worked with the other top leaders of the House and Senate panels in developing the plan, saying she thought it was important for the panel to make the decisions on what reductions were made, not those outside the Ag Committees.

Stabenow insisted that Lucas, Roberts and Peterson all were involved in the process "as much as they wanted."

Next steps for farm bill process: Stabenow said the Super Committee-Farm bill linkage process fostered a close working relationship with her counterpart in the House, Rep. Frank Lucas (R-Okla.), and their staffs. She said the way forward is to hold more hearings and the farm bill process to date will serve as "the foundation" for moving forward to eventual legislative markup. "We flushed out other areas where the tough questions are," Stabenow said of the work done to date on the new farm bill.

On individual farm bill issues, Stabenow noted there is no longer support for continuing the around $5 billion in direct payments, but there is widespread support for crop insurance. She acknowledged different regions of the country bring "difficult challenges" in formulating farm policy. She and others at the confab noted support for streamlining conservation programs, adding the process to date has narrowed the number of conservation programs from 23 to 13.

Stabenow also noted her interest in specialty crops, noting her state of Michigan is second only to the state of California for this agriculture sector.

Crop insurance is key: "Crop insurance was the number-one area that people wanted to keep. And that’s exactly what we did. Crop insurance is the cornerstone of risk management in our proposal."

Conservation toolboxes: The package put together consolidated current conservation programs into five "toolboxes," she noted, including ones on working lands, regional partnerships, easements, the Conservation Reserve Program and Grasslands, water protection, etc.

What will happen moving forward: Stabenow wants the farm bill package to serve as the starting point for what the panel does next. Hearings will be on tap in the panel, as they seek to put together the farm bill.

MF Global: Stabenow outlined this as another priority for the panel as they seek to find out what happened, including the missing customer funds that have been estimated at $600 million to $1.2 billion. Stabenow said it was important to find out when those customers "will be fully made whole" and then the panel needs to determine what to do to make sure the situation does not repeat. She noted MF Global was the eight largest bankruptcy in US history. The MF Global matter has affected many in the US ag sector, she said, including farmers, ranchers, cooperatives, grain companies and grain elevators.

The Senate Ag Committee has a hearing set for Dec. 13 and will feature testimony from three groups, Stabenow said: victims of the situation, company executives from MF Global and regulators. The panel already held a hearing which was to be about the Dodd-Frank law but quickly turned to a session grilling Commodity Futures Trading Commission (CFTC) chief Gary Gensler about the MF Global situation.

Immigration reform: Noting this is a "very big issue" for agriculture and the country, Stabenow said everyone is affected differently and she urged agriculture to "come together" on this topic. She detailed efforts by some, including Sen. Dianne Feinstein (D-Calif.), in offering separate agriculture immigration legislation, adding this is "a complicated issue" as some do not want to separate immigration issues but instead want major overall reform.

Roberts:

A different view of the farm bill effort: Roberts reiterated that he still has not seen the legislative language that was worked out for inclusion in the failed Super Committee effort. Stabenow and Lucas "tried extremely hard to do what was right" but Roberts said it was still difficult to know what that was since he still has not seen the legislative language that went into the package. He labeled the farm bill process to date as "the most odd, unique, unprecedented" he has ever seen.

Roberts called for a "clear, open, honest debate" on what needs to go into the next farm bill via a "regular order" process.

Regarding the "secret" farm bill package, Roberts noted concern about the reported big increases in target prices and concerns about trade policy implication regarding several farm bill developments. He complimented the cotton industry for coming up with a crop insurance/revenue assurance program that he said could be the wave of the future. "They knew they had a problem," Roberts said of the cotton industry, "and they came up with an innovative program." He also noted support for crop insurance and conservation program developments. He warned that a focus must be made on the management of food and nutrition programs.

Regulations: Roberts continued to focus on regulations, labeling it a "Katrina-wave" of regulation that faces the US, including farmers and ranchers. He repeated a call for the need to "rein in overburdensome and duplicative regulations." Once that happens, Roberts said that those in the US can "pull themselves up by their bootstraps." Roberts called for a "regulatory time out" to assess costs and benefits of existing and pending regulations.

Roberts specifically pointed out the USDA proposed rule from the Grain Inspection Packers and Stockyards Administration (GIPSA) on livestock marketing, noting that it has to be understood that such a plan would have immense costs, including ones that would be felt by consumers.

MF Global: Roberts stepped those in the audience through the questions he feels still haven’t been answered by CFTC Chair Gensler, specifically why he opted to become a "non participant" in the process on MF Global as to not be a "distraction" on the issue. Roberts said by taking that step, Gensler "has become a distraction" during the process. Roberts said Gensler's actions to date "have raised more questions than they have answered."

Further, Roberts said that he hoped the MF Global situation did not spawn still-more regulations as he maintains the preventions against what allegedly happened at MF Global are already addressed in law. But, like Stabenow and others, Roberts stressed that lawmakers need to "get to the bottom" of what happened, adding a phrase used by others when he said, "Who knew what, when?"

As for now-former MF Global chief Jon Corzine (also a former US Senator and New Jersey governor) and whether he will appear before the panel, Roberts said he believed it would "easier" for Corzine to not respond to House panels on the matter, "but it will be a lot harder for him to say no to his former [Senate| colleagues."

Ag security: As a former chairman of the Intelligence Committee, Roberts has been deeply involved in national security issues and warned that the US "must be vigilant and prepared" regarding agriculture security matters.

Peterson:

Future of failed farm bill effort: Peterson said that all members and commodity groups did at least get briefed throughout the process that saw a plan drawn up to reduce $23 billion in spending from agriculture and nutrition programs.

But he also called for the language of the bill to be released so it would serve as the starting point for what the panel works on relative to the next farm bill. But he also said there was "a slim chance" that the package worked out could be tapped as a partial pay-for on a package to continue unemployment benefits, extend the payroll tax cut and the so-called "Doc Fix." The latter, Peterson said, has a cost of around $21 billion and the farm bill plan would save $23 billion. "But we’ll see what happens," he added.

Should the panel resume a "regular" farm bill process, Peterson predicted Committee members will be able to develop a bill "but when it gets to the floor, who knows!" He predicted the effort will have to be done by May to stay ahead of the coming election-year focus.

Dairy policy reform: Peterson pushed hard for including the Dairy Security Act in the aborted farm bill package, and said he wants the language released because it would show changes made in the dairy policy reform package should answer most concerns expressed by the pending legislation. However, he added," the International Dairy Foods Association (IDFA) will never like what we have done."

Regulations/MF Global: Peterson said he has introduced HR 3010 as a way to fundamentally change how regulations are developed in the US government, a bill that the House approved last week.

Specifically on MF Global, Peterson said it was key to find out "who knew what, when." Peterson said he has a plan to return regulation in this area back to 1968 levels to make sure customer funds are kept "segregated" from company funds and that those cannot be invested without the customer saying so and limited to US Treasury bonds and general obligation bonds.

But he stressed, "I am not a heavy regulatory person."

Regarding animal welfare issues, Peterson said people should know that some of the efforts regarding caged birds will "significantly increase the price of eggs and food."

Comments: There are still some divergent views on how the now-failed Super Committee-linked farm bill process unfolded, but it is clear that panel leaders now say that a regular process needs to unfold as the process moves forward. How the process unfolds now will also have a "deadline" of sorts as most observers conclude if the plan cannot be completed by May, it will likely slide into a post-election effort, one that could include being wrapped into a potential post-election, lame-duck session.

The other clear signal is that MF Global is a key issue the panels will be devoting a considerable amount of time to in the weeks ahead. That will jockey with the farm bill for focus as the panel seeks to get to the bottom of what happened. It is clear that many customers of the firm and even those who were not directly customers of the firm have been negatively impacted by the matter. Both Roberts and Peterson noted a review should also be made regarding the CME's actions/role in the MF Global matter.

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